Saturday, 28 April 2012

It’s always been about the money; colonial expansion, government, business or just household budgets, it’s all about the money. Domestic fights, most of those rotate around the money.

For the increased rhetoric and personal “anti-Salmond” attacks in the Unionist media, it’s all about the money. The Union has good reasons to use every dirty trick in the book to keep Scotland on board, in fact it probably has somewhere around £15 billion of these reasons every year. Throw enough mud, eventually some will stick in the common perception, justified or not. It’s called propaganda and the Union army has the propaganda troops in form of Union media firmly in its trenches.

This forces the unbiased individual to try to understand why this is, what motivates the need to so virulently protect the status quo? In the end, it’s all about the money, UK plc is effectively bankrupt, but with Scotland still on board the final reckoning may be delayed somewhat. The fact it destroys the aspirations of a nation is as relevant to the Union as the feelings a banker has towards those about to be made homeless through the banking systems own profligacy.

The London perspective towards Scotland is very much the “I care not for thee in the rubber dinghy, for I am in the admiral’s barge mentality”. Boris Johnson confirmed this with his “Devo Max” for London and “Spending in Croydon will help Strathclyde” nonsense.

Untying Scotland’s share of UK income/outgoings is difficult indeed if Westminster accounting is used, GERS is still wildly inaccurate, though no longer quite so laughable as it was. London is a master of fiscal obfuscation. They tell us the finances are “too interdependent and complicated to unravel” – we’re expected to actually believe this spin in today’s computerized world.

Examining the unitary state which is today’s United Kingdom, the money aspect is stark indeed. As austerity bit and has progressed the United Kingdom is now paying out more in benefits than it raises in both income tax and national insurance.

The benefits to income tax situation is only a microcosm of the big picture. For 2011/2012 the projected level of all HMRC receipts is expected to be marginally over £580 billion. That’s being added to at an extra £120 billion or so yearly, getting on for 20% of income.

The UK has, by various accounts, total “on the books” public debts of about £1 trillion, not including unfunded pension liabilities and that the “off the books” or more difficult to ascertain debt such as PPI/PFI/PPP commitments with underwriting required for the banking debacle, the true number is said to be somewhere approaching £4 trillion.

Excluding the pension aspect, we’ve typically always paid for that from current year contributions, a “nice” real number for UK state debt is around £2 trillion.

To put that into numbers we can appreciate, £2 trillion is a debt to income ratio of almost 4:1. Using the banks own mortgage methodology they’ll loan, if we’re lucky enough to qualify, perhaps 3 times our income to us to buy a house [3:1]. So we have a situation where UK plc is in negative growth, couldn’t qualify for a mortgage, spends more than it receives every month and can still borrow.

Effectively, by the banks own rules, the UK is bankrupt – they wouldn’t lend to it as an individual. The only item preventing default is that the banks themselves can’t afford the UK to go belly up, they stand to lose too much, so they keep loaning more money. It’s Greece without the panic. Right now they’re loaning it at the ridiculously low level of about 1.8%, so our cost of that debt is artificially low. When, not if, interest rates creep back up towards 4% our cost of the debt will double. It is not unusual for nations with ongoing liquidity problems to see the cost of credit double or triple in as short a period as six months or less.

The cost to the treasury of a simply normalized interest rate will see repayments increase by about £40 billion a year, or substantially more than Holyrood’s annual budget. Add that to the £120 billion or so of increasing debt which will annually add another compounding £4.8 billion a year and there’s a realistic scenario that by the close of 2016 UK plc will be spending well over £100 billion a year on interest alone. Three times Holyrood’s budget.

The alternative for Scotland is to go it alone. In theory we’d be held liable for 8.3% of that present £2 trillion, or about £166 billion in debt. That’s an overly fair assessment as it overestimates our share of the banking crisis, reflecting it by population. If the accepted accounting for that banking bailout was used where share is allocated to each country by percentage of revenue, we’d be in far better position.

A probable worst case scenario is a UK demand to assume £166 billion of national debt.

Now we should take time to look for the deductions.

Holyrood has given notification to Westminster that it should be prepared to pay for nuclear power station decommissioning in Scotland, perhaps some £30 billion as its share. London was also advised it will need to proportionately stump up for another £30 billion or so as its cost of field decommissioning in the North Sea. The outpouring of indignation in the House of Commons at this announcement can be ignored – this obligation is the reality. If Westminster refuses to accept it Holyrood simply effectively deducts it from any potential obligation. We just don’t pay as we’re neither legally nor morally bound to.

Fixed and mobile global assets of UK plc is very difficult to quantify, but appears set to be somewhere under 100 billion, not including such items as Falklands oil, to which the UK through Cameron’s statements has renounced claim. This doesn’t include items solely within or the property of individual nations within the UK. Scotland’s share would possibly be negotiated around 10 billion.

There are substantial other costs that UK plc should properly bear, at least proportionately, such as clean ups around Dalgety Bay and Dounray.

Using these figures with the banking crisis bailout included there’s a residual value in Scotland’s portion of the banking debt of around 50%, the shares are worth an average of about half what was paid for them. Selling these shares would give Scots another offset of around £50 billion.

At day’s end we’d inherit somewhere around £200 billion in “UK debt”, and we’d expect offsets in excess of £120 billion. Not including those unfunded pensions that’s what we’d owe. The picture improves under almost any other scenario.

An £80 billion tab is about the worst to be presently expected.

Gross tax receipts per capita in the UK are about £9,500 per person, with Scots contributing substantially more than UK average that’s over £10,100 per Scot. With 5.5 million of us that’s right at £55 billion. This figure now includes a dead reckoning on Scotland’s assets allocated to “The City” simply because companies are headquartered there. It will also reflect all revenues from all sources, many of which are not included in GERS such as the exclusion for oil revenues because they are in “UK waters” or liability for Trident because it’s “in Scotland”.

Scotland will have somewhere up to a £15 billion surplus in the event of independence, the SNP says it will be over £500 per person better off, but they’re using GERS. The tax income here was calculated using the national average per person tax paid and multiplying that by the higher ratio paid in by Scots. Quick and dirty perhaps, but exceedingly difficult to counter, spin or obfuscate. Taking the per capita contribution effectively removes the opportunity for Whitehall’s obfuscation.

The net result is a Scotland that can either be in surplus by the end of 2016, or remain part of the UK where it will have spiraling debt, a negative balance sheet, increasing austerity and in all likelihood be well on its way to following Greece, Spain and Portugal to financial oblivion.

The side effects of remaining within UK plc will be massive youth unemployment, increasing adult unemployment and substantial losses of rights and benefits across our entire society because with the upcoming pocket-money reductions from Westminster, Scotland simply will not be able to afford to maintain services and there’s absolutely nothing Holyrood will be able to do about it.

There are three Union parties with the same message: Stronger together. This message could be individualized with each proclaiming a simple truth; unity in deprivation, unity in austerity, unity in bankruptcy.

Thursday, 19 April 2012

It is now on its way to becoming fully enacted; something that was inconceivable the day after the present Holyrood administration was chosen by Scotland’s electorate.

That this bill is heading towards statute carries substantial and strong messages.

The issues that would have prevented it being passed even at Christmas have been largely deleted, not every deleterious aspect is gone, but the Bill is now palatable in the view of our elected officials, and for most who now examine it there’s little of significance that can cause harm to the devolution process.

Setting aside what’s in the Bill at present, it is worthwhile to examine what’s not there. Five of six demands made by the current Scottish government were not included, allowing Unionist parties and commentators to crow over a “climb-down by the Nat’s”. The reality of the situation is that without Westminster cooperation there would be no single additional power at all.

Holyrood has played “grown up” politics, it has recognised it has achieved everything possible in the timeframe and under the current constitutional settlement that it can achieve. By removing the severely toxic aspects of the Bill, by exposing the constitutional irrelevance of the House of Lords, and by leaving the constitutional appetite whetted but un-sated, Holyrood has gained much.

Edinburgh now has the precedent set that under the present constitutional settlement any transfer of powers will fundamentally only go from Westminster to Holyrood, unless Edinburgh is in agreement. If we Scots in future elect a government that undermines any hard won sovereignty, that will be our issue, for now the process is safe. However, a Union party in power could dramatically change that dynamic.

A precedent has also been set, and completely unheralded in Scotland’s mainstream media, together with an acknowledgment by all parties that Scots are hungry for more power in their own affairs. The precedent was re-enforced by the fact that under this repatriation of sovereign powers none saw a need to ask we Sovereign Scots if it was something we actually wanted.

Step back and think. When the ’97 referendum took place there was a whole separate question dealing solely with tax raising powers, powers designed never to be used and limited only to 3%. A short fifteen years later we witness a situation whereby that taxation share is more than tripled, but a referendum is not seen as required because all political parties tacitly acknowledge the Scots appetite is for more.

Many Scots would also agree a referendum isn’t required, as long as the process cedes authority to Holyrood. Should the reverse ever become a proposal those same individuals are likely to ferment some severe dissent, and rightly so.

As we think about the tax issue, that single change from optional to mandated tax devolution, requires alterations at HMRC to fundamentally institute a Scottish Revenue Service, one which will provide discrete accounting of Scottish income tax. That alone is a significant preparatory step on the road to independence.

The Scottish Government has also won tacit acknowledgement that the Scotland Bill isn’t the real issue anymore. This legislation has been overtaken by constitutional events that are continuing to gather pace. There is a strong likelihood that by the time the provisions of the Bill actually come into force, they will be irrelevant.

The optimist among us would rather view the Scotland Bill as a highly significant milestone, a milestone that is quietly heralding a new dawn, a sunrise showing behind the current acrimony of Westminster / Holyrood relations. In the best of worlds it would be but the first example of mature and adult negotiation between two governments who will soon need to discuss a myriad of issues as equal partners rather than as colonial power and subjugated nation. As we have seen from recent document releases concerning treatment of Kenyans during the Mao-Mao Uprising, Westminster has a history of abuse towards those seeking their own path.

Both governments appear to have reached an understanding, as evidenced by this Bill’s passing, that it is now better to clear the decks of old business and prepare the way for the future.

That David Cameron sees this as a probable future is evidenced as much by his silence to events as by his negation of the Lords amendments. The SNP in Westminster recently advised the Commons that England, the rUK would be liable for a majority share of decommissioning of current UK nuclear power stations in Scotland. That could amount to anywhere north of 25 billion. Although there was consternation in the House with several individuals giving quotes of outrage, nothing was forthcoming from Number 10.

The Commons were also advised that there would possibly be a bill for decommissioning old oil fields in Scotland’s North Sea, the price tag for that was put at 30 billion. The government of the future rUK was again silent on the issue, though Scotland’s mainstream media reported it principally as being a cost to be borne by a future Scotland. Often that which is not officially said carries more value than the witterings of interchangeable underlings.

That there will be two separate, equal governments after 2016 was verified by the bookmakers. Betting shops rarely get it massively wrong, at the initiation of the Scotland Bill the odds for Scottish Independence by 2020 could be had as high as 10/1, checking on the odds of a “NO” immediately after the announcement of the Bill’s passage showed William Hill offering 1/3 against. Although betting odds are weighted by many factors, that’s a huge change in the lifespan of a single bill with regards to the constitutional outcome of four nations.

It’s a change that could now be being mirrored by the stance of the relevant elected political leadership in each nation. We can hope.

Tuesday, 17 April 2012

There are fundamentally two governments within the UK seat of power, London. Westminster and the City of London are both calling the shots, and although the City is noticeably a shadowy figure in the background, through the power of money it’s arguably by far more influential. However, these dual policymakers don’t always have similar goals.

Demonstrably the City invariably prevails. Witness “too big to fail” and “The banking crisis”. In both scenarios City greed destroyed what it had attempted to build, and then pressured lawmakers into requiring the taxpayer to underwrite or pay for the stupidity of City policy and actions. Laws were even changed to facilitate City operations, simply recall the HBOS and Lloyds merger for just one example.

Lawmakers now see it as normal to use our public funds to bail out private industry, as long as it’s big enough to be of concern to the City. In this respect the City controls much of mainstream policy at Westminster.

It’s been that way for centuries; the City of London Corporation’s eight century old “war chest” of cash reserves used to fight anything which may be inimical to its rule and authority is exempt from FOI legislation. It does not matter to the City of London Corporation how the war to protect and shield it is undertaken, whether it’s by direct means, by association or tenuous links through simple influence or obligation.

All that matters to the money-men (and women) of the City of London is that it wins.

The City of London and by extension in common parlance, “The City” survives through money, for money is power, it is the power behind thrones, behind governments, behind political parties, behind wars. In our modern world, little survives, or even dies without access to money. Witness the administration process – the City extracts its death toll, the little people are left to fight over what remains.

The City places allegiances that provide profit above all. That was evident in its financing of the Second World War axis powers, specifically Nazi Germany, where the chairman of the Bank of England, Montague Norman was instrumental in funneling untold millions to Hitler’s coffers, including the Czechoslovakian gold reserves after the Nazi’s invaded their country.[1]

So much for the Czechs belief that they could trust the British state, sadly, like so many others, they put their faith in the City.

From that day to the present privatisation process that’s spreading the tentacles of capital and greed through England’s NHS and other public institutions, the City has played its part.

The Bank of England isn’t part of the UK state in so far as it is not directly controlled by Westminster, it is part and parcel of the City and other than to protect its base trading currency Sterling, has demonstrably worked as much for international finance and its own nefarious purposes as it has in support of either the UK government or the Crown. In cases where the City has found its purposes to be at odds with the common weal its tendencies, as noted above, have leaned towards what’s best for the City.

With the central bank and the City not dedicated to the national interest, other than as it supports their own ends, there is substantial leeway for both to work in nefarious ways against the common good and in pursuit of the profit gods.

Privatisation of education (which may be completed within 3 years, according to the NUT [2]) and the NHS in England are two prime current examples, privatisation of water in England is a recent past example. When a system is in the public domain the costs of the system are issues for the public purse, however the benefits of the system are also devolved to a common benefit. The net to commercial enterprise, excluding some ancillary contracts, is zero. The potential for profit by the private sector is close to zero.

Looking slightly more closely at water, now transferred to the private sector, the net cost to the public sector should equate to the previous net cost to the private sector, zero. Somehow in the great scheme of things the denizens of the City of London, where these transactions take place, have managed not only to facilitate the transfer of assets from public to private but to keep the public on the hook for ongoing maintenance and upgrades in projects like the London sewer renewal. This sewer project set to cost the UK billions or the equivalent of about £150 for every Scots taxpayer.

That’s £150 for an upgrade to a privately owned network that’s not even in our country.

The City has done well from its inappropriate privatisation of Water. Inappropriate because any nation or community should have universal water, health and elderly care available at basic levels. At a minimum the areas which should invariably be in the public domain for at least basic service, are fields without which life would quickly become untenable if the company controlling it was liquidated, or areas which promote societal equalisation of opportunity i.e. access to education.

Water is one such area.

The Union parties would have Scotland follow England’s example and privatise water so that we also could subsidise private profit, we’d just be doing it two countries instead of one. The Union likes standardization, it prefers everything to be the same, it constantly promotes the idea of “one country” rather than the reality of two nations bound by a political Union that has shifted and slid through time to now include two others.

Privatisation of the NHS has begun and despite the cries of doctors, nurses, consultants and physicians it will march on. It started under the Conservatives, continued under Labour and is striding forwards under this latest coalition. There is one organisation which has the power to push such a policy through successive different governments; there is one City that stands to profit from it.

NHS privatisation will be some time in coming. The very size and inertia of an organisation like the NHS will take time to move. The political groundwork must also be prepared. The charge is that the nation can’t afford the NHS, yet we’re told it can afford Trident and a near countless procession of foreign wars.

Consider the argument, the nation can’t afford the NHS, yet medical care will still be required. If the NHS doesn’t provide it in ten or twenty years it will be up to the free market, the City, to be instrumental in its provision. The difference with the City is that with everything else it will be based upon an ability to pay. There will be an inbuilt profit factor, that factor will be as much as the market will bear for such is the way of big capitol. The City would like to see profit margins of as much as 100% or more, but would possibly accept between 20% and 25% as viable. The private company my husband worked for operated on a nominal 1.43, or 43% profit margin.

With NHS expenditure in 2008/9 in England and Wales at approximately £100 billion [3] and a conservative 33% profit margin that means the immediate cost of a private health service to the nation would exceed £130 billion, or over £1,000 extra every year for taxpayers in order to satiate the City’s avarice. There would be no extra service, no premiums, that’s just to keep the waiting times and inefficiencies we have today. Then we can open for discussion the profits to be made from health insurance.

Or we can open for discussion how an independent Scotland should tackle these issues.

Sunday, 15 April 2012

Recently there was an article in The Economist misnaming Scotland as “Skintland” the cover almost totally misrepresenting the situation post independence.

There were two remarkable outcomes from the Economists graphic; first was the level of media coverage and story dissemination it generated, resulting in a superb short term publicity stunt. Second was the data showing the wealth distribution graph within the current UK. A graph which is relatively linear, progressing steadily until the topmost segment, the City of London, is reached and then there is an inordinate jump in personal GDP.

Many railed against the Scots graphic, but none appeared to question why or how the City of London has managed such an enormously disproportionate wealth gap when the odds seem to be stacked severely against such an occurrence.

In the City of London everything costs more, salaries, accommodation, food, basic necessities, transport, even parking is at a severe premium.

Under a taxation system where higher earnings should equate to higher taxes, and where there’s no “London loading” taxation exemption, the GDP differentials should self correct.

It costs more to incentivize staff to relocate to London. Organisations must account for higher property valuation overheads. In a logical world anyone could be forgiven for believing there would be a mass exodus of companies from London to other parts of the UK; that this hasn’t happened indicates a situation that goes against almost all economic models, especially in an era of almost instantaneous communication.

The answer lies in England’s past. It’s a situation that not only the UK inherited but which has spread its tentacles worldwide, has been responsible for driving UK and often world policy for centuries and from Scotland’s perspective, still continues to do so.

The City of London Corporation and its constituent members have self evidently been responsible for untold levels of global misery, and arguably uncounted loss of life.

Behind all of the atrocities, the anti democratic laws, the insane executive orders lies the power of money and the pursuit of it within the City. Behind the policy of Westminster, particularly under Tory governments lies the power of the Corporation.

The Corporation is an ancient creature, dating in its present form from William the Conqueror in 1067; it has survived largely untouched because of the power of money. Fundamentally the City of London is attractive to business headquarters because it is in effect an offshore tax haven within the British state.

William the First granted the City Corporation this special charter because he knew without it, London and therefore England was unlikely to be subdued. With the City and its resources on his side the task was achievable.

In reality “Tax Havens” are playgrounds of the very wealthy where the laws of the land of birth or residency can be avoided. It’s also significant that almost all current “tax havens” are former British colonies or current crown dependencies. The British Virgin Islands, the Turks and Caicos Islands, the Isle of Man, the Channel Islands, the Cayman Islands; the list goes on.

The Cayman Islands' tax and secrecy laws are not designed for the benefit of the small number of residents. They exist to help wealthy people and corporations, mostly in the US and Europe, get around the rules of their own democratic societies. The outcome is one set of rules for a rich elite and another for the rest of us.

While the City of London Corporation profits, the rest of Society suffers an undue burden.

The City's status in Britain stems from a simple formula: over centuries, monarchs and governments have sought City loans, and in exchange the City has extracted privileges and freedoms from rules and laws to which the rest of first England, then Great Britain and now the UK must submit.

Historically it wasn’t all bad, the Corporation did reign in the odd unwieldy monarch, but it wasn’t altruism, it was enlightened self interest to protect its own. In modern times, post 1707, the Corporation has simply worked financial systems to its own purpose.

Whenever the Queen makes a state entry to the City, she meets a red cord raised by City police at Temple Bar, and then engages in a col­ourful ceremony involving the lord mayor, his sword, aldermen and sheriffs, with a character called the Remembrancer. This modern ceremony marks the political separation at the City's borders.

The Remembrancer, whose position dates from the reign of Elizabeth I, is the City's official lobbyist in parliament, sitting opposite the Speaker, and is "charged with maintaining and enhancing the City's status and ensuring that its established rights are safeguarded". His office watches out for political dissent against the City and lobbies on financial matters.

Then there is the City's Cash, "a private fund built up over the last eight centuries", which among many other things helps buy off dissent. Only part of it is visible: the Freedom of Information Act applies solely to its functions as a local authority or police authority.

The full assets of the City of London Corporation are beyond even rudimentary democratic scrutiny.

The Corporation is different from any other local authority; international finance co-mingles with ancient rites and customs that underline its separateness and power with mystifying and near invisible interconnections within its guilds.

Among the City's 108 livery companies, or trade associations is found the Fletchers (arrow-makers) as well as the Worshipful Company of Tax Advisers, whose prime aims is "to support the Lord Mayor and the City of London Corporation", and the Worshipful Company of International Bankers.

For centuries reformers in England, then Britain have tried and failed to have the corporation merged into a unified London authority. The political landscape often heaved and shifted in its direct vicinity, but the City stood immune. Resulting exemptions and immunities from law and the ability to effectively remove issues from history that the City's grandees have created are astonishing. In 1881 the Times wrote, "The City Corporation is sacred although nothing else is."

For much of the 20th century, the Labour Party had a pledge in its manifesto to abolish the corporation. Peter Mandelson's grandfather said: "Is it not time London faced up to the pretentious buffoonery of the City of London Cor­poration and wipe it off the municipal map?" "The City is now a square mile of entrenched reaction, the home of the devilry of modern finance."

Clement Attlee took up the baton in 1937. "Over and over again we have seen that there is in this country another power than that which has its seat at Westminster," he said. "Those who control money can pursue a policy at home and abroad contrary to that which has been decided by the people.

Attlee was perhaps bristling at the fact that the City of London Corporation was a driving force behind the Nazi Party.

All political organizations require money, Germany in 1930 was bankrupt, yet by 1938 she had the best infrastructure and war machine in Europe. It all had to be paid for.

Perhaps Attlee was viewing the situation in the same light as Paul Einzig, foreign editor of "Financial News," who wrote at the time in World Finance, "Practically the whole of the free exchange available to Germany for the purchase of raw materials was supplied directly or indirectly by the British Government."

One year later The City Corporation was still making money in Nazi Germany, the UK Government knew for weeks that Hitler was massing troops on the Polish border, yet in the thirteen days before declaring war on September 1, 1939, Britain shipped Germany 17,000 tons of rubber, 8,000 tons of copper, and large stocks of nickel, tin and lead.

The London "Evening Standard" for August 21, 1939 stated: "To execute the orders in time, heavy withdrawals were made from stores in the United Kingdom. A third of our stocks of rubber and a quarter of our supplies of nickel have gone and are on their way to Germany."

It might be mentioned that the City financing of Nazi Germany disappeared from the record in Sutton's post war account of the financing and support which previously included very generous representations from England's banking, insurance, munitions, transportation and oil companies.

Even after war was declared it may be construed that the City was behind Chamberlains refusal to permit the RAF in France to overfly Germany and hit German targets. German infrastructure was declared “private property” by an executive order of the Prime Minister of the day. The result was the German surprise attack in the Ardennes and the loss of the British Expeditionary force.

The City of London Corporation made its money, and the Nazi assets backing those funds were protected, for a little while at least.

Eight years later Clement Attlee, now Prime Minister charged that "from the outset a large part of the City had given every support and encouragement to German rearmament."

No part of the City of London Corporation or its officers was ever held to account.

Labour never did abolish the corporation; instead, the Greater London Council was abolished in 1986 under Margaret Thatcher. In 1996, Tony Blair got Labour to replace its pledge to abolish the corporation with a promise merely to "reform" it.

Such is the influence of the City of London Corporation over the politics of the British Isles; it is everything to do with the power of money and the revolving door between the City and the Palace of Westminster.

In 2002 this Blair charter amendment was an astonishing gift to the corporation.

Like any other local authority, the City of London is divided into wards. These elect candidates to serve on the Court of Common Council, the City's principal decision-making body. Unlike any other local authority, however, individual people are not the only voters: businesses can vote, too. Political parties are not involved - candidates stand alone as independents - and this makes organised challenge to City business consensus all but impossible.

Before 2002, the 17,000 business votes already swamped the 6,000-odd residents. Blair's reforms expanded the business vote to about 32,000 and allowed a say, based on the size of their workforce in the Square Mile, to international banks and other big players.

Voting now reflects the wishes not of the City's 300,000 workers, but of corporate managements. Organizations as diverse as Goldman Sachs and the People's Bank of China get to vote in what is arguably Britain's most important local election, and thereby obtain a direct policy line to Number 10.

The City spin on the gift was that it would be "radical change that is essential to keep a world-class financial centre". Glasman called it "a retrograde step”. These workers were effectively being subordinated to a level comparable, he said, to the voting rights of chattel owners in the pre-war American South: the slavery franchise.

What is critical to those who live in modern Britain is it means the City's rights pre-date the construction of even the Union of Parliaments, and this has placed it outside parliament's normal legislative remit.

The City evolved as an institution not so much subordinate to parliament, or the church, or the Crown, but adjacent to and intertwined with them in complex relationships.

It is no coincidence that the capital of what was once the world's greatest empire - with the City as "governor of the imperial engine", according to the historians Cain and Hopkins - has become a focus of the modern global offshore system.

The Bank of England, fixed in the heart of the City, in effect encouraged tax havens. By the 1980s, the City was at the centre of a great, secretive financial web cast across the globe, each of whose sections - the individual havens - trapped passing money and business from nearby jurisdictions and fed them up to the City: just as a spider catches insects. So, a complex merger involving a US multinational could route a lot of the transaction through Caribbean havens, whose British firms then send much of the profits up to the City.

This is the source of the City’s skewed GDP and balance sheets.

The Crown dependencies of Jersey, Guern­sey and the Isle of Man, which focus heavily on European business, form the web's inner ring. In the second quarter of 2009, Jersey alone provided £135bn in bank deposits to the City. Jersey Finance, states: "Jersey is an extension of the City of London."

The next ring of the web contains the British overseas territories, such as the Cayman Islands and Bermuda. Like the Crown dependencies, they have governors appointed by the Queen and are controlled by Britain in myriad ways, but with enough distance to allow Britain to say "There is nothing we can do" when it suits. This “not us” cry is a fallacy.

The web's outer ring contains an assortment of havens, such as Mauritius and Hong Kong. Britain does not control these, but they still feed billions in business to the City.

The corporation has two main claims to being a tax haven: it’s semi-autonomous, floating partly free from Britain (like the Cayman Islands), and it’s the hub of a global network of tax havens sucking up offshore trillions from around the world and sending it to London.

Nearly every multinational corporation has offshore subsidiaries (not counting those in Lon­don). The biggest users of offshore finance are banks. It was recently reported there are over 550 offshore subsidiaries just for Barclays, RBS and Lloyds. Banks go offshore to escape certain financial regulations, they can grow faster. This makes the City and its offshore net a big part of the “Too Big To Fail” story.

This was just one of myriad facts within the City that gave Barclay’s chief executive, Bob Diamond, the brazen cheek to tell the UK Treasury select committee on 11 January that he didn't know how many offshore subsidiaries his bank had, but that the "period of remorse and apology" for banks should now end.

What’s the purpose of the dubiously elected Lord Mayor of London; The Lord Mayor and colleagues promise to "take up cudgels on behalf of the City anywhere in the world on any subject which is of concern to the City". They appear ably aided by Westminster policy.

In the end the purpose of the City of London Corporation as a municipal authority is its least important attribute. It’s fundamentally a massively financed international offshore lobbying group pushing for international financial deregulation, tax-cutting and tax havens.

For Scots, there are two issues in the future. The first is extracting themselves from the tentacles of the City, for every Union vote is surely not a vote for democracy, it is a vote for the City and its control of government policy.

This is why Union policy is nearly identical for every party. Union policy is effectively controlled by spread betting on behalf of the City.

If Labour wins, the bondholders of the City must be placated.

If the Tories win, their backers in the City must be appeased.

If the Lib-Dem’s manage a miracle they are bound by both bondholders and backers.

There is only one solution to the trap, “YES” in 2014. Until then Scotland will be ruled by Westminster in name only, the true power lies in an adjacent square mile that our votes and democracy have no ability to impact.

Liberty or the London Corporation, it’s really that simple.

These are only some of the well over 30 articles and archives read in the making of this particular blog.

Friday, 13 April 2012

The clear answer is that as a national government it must be “no”. As a product of Westminster’s machinations it served its function for less than a decade. As a vehicle of national hope and inspiration, of grass roots change it failed for the greater part of that first decade. Holyrood has come somewhat of age not because it was designed to, but in spite of the fact that it was created to forever prevent its own maturity.

Scotland’s government in Edinburgh is seeing small measures of success simply due to the overwhelming opinion of the Scots electorate, an electorate that did something it was designed to be unable to do – it elected a majority nationalist government.

The fact that a political franchise was designed to fundamentally defeat democracy declares it, quite simply and just as conclusively, not fit for purpose. The D’Hondt system isn’t intrinsically bad, it was Westminster’s modifications to it that cause issues; modifications designed to prevent Scots aspirations.

The tipping point towards reform in Scotland has been crossed as Scots became aware that the only political advancement they are likely to see is that which they take for themselves. This understanding is also evident outside our borders from the increasing crescendo of anti Nationalist verbiage in Scotland’s foreign controlled mainstream media, to such an extent that the legislature in Holyrood even stands “accused” of failing to act in areas where it has no current authority, such as closing corporation tax loopholes.

Holyrood might as well stand accused of failing to steer US foreign policy.

Opinion polls on independence are now neck and neck; momentum running with the liberty option.

Still the political parties and mainstream media appear not to want to discuss the future of democracy in Scotland. This is to be expected of Westminster backed organisations, they are devoted to protecting London rule and the illusion of democratic process perpetuated by vested interest.

The independence proponents must provide an alternative, they must provide the disenfranchised and apathetic with a way to either make a difference in the political process or believe that it will at least actually represent them. They must bring the greatest slice of franchise possible on board.

This thought process reveals a significant set of questions that remains unasked; at the forefront is what we in Scotland can learn from Westminster’s mistakes and how to apply that learning so that no part of our own resurgent nation undergoes the damages presently inflicted upon the current UK from London.

We should study as many varied systems as possible in our search for a singularly Scottish solution to good government, an enfranchised electorate and strong political accountability.

We must begin by asking ourselves why we accept, even expect breach of promise from politicians when in any other area of life they would be required to hold to their word or face consequences. Breach of promise should apply to politicians equally with any other individual.

What of the current Scottish Parliament itself, we should see if it is actually fit for purpose and thoroughly examine what can be reasonably be expected of it and the direction it will choose, and ensure that it’s path is the same one we as individuals would collectively walk.

The modified D’Hondt system of proportional representation that Scots presently live with is inappropriate. It was designed, tailored by another nation to specifically prevent a single party majority in Scotland.

Any political system must be designed to reflect the wishes of its electorate, not be put in place to defeat them. That would perpetuate the wildest dreams of history’s cruelest regimes.

In the longer term due to both the relative quantity and the method of the MSP’s elected through the list vote, it must be changed. The first past the post system is fine for constituency MP’s, the number and quantity of these is also reasonable for a nation of Scotland’s size.

The issue with the list MSP’s is that they are primarily selected by party officials, and that is hardly appropriate as the electorate begins the process already somewhat disenfranchised. The system could perhaps be adjusted by reducing the list seats to 50, still using the D’Hondt system, constituencies could be set to 70 with size determined by population.

We could have 10 regions; each would be approximately geographically equal. Each constituency within the region gets its votes totaled and that selects the list MSP’s under the D’Hondt system with the caveat that the highest number of votes on the list is also the first MSP selected. Simply because a party wins a constituency seat it should not see its list vote diminished. These all could go to a lower house.

That works fine, up to a point, it certainly is more representative of the wishes of the electorate.

The problem with a D’Hondt system is that almost invariably there is a requirement for a coalition. The present Holyrood parliament is a definite exception to that rule. Coalitions are not necessarily bad, but by their very nature they are intrinsically less stable.

The second problem with the current voting system which is fully highlighted by the corrupt and intransigent Westminster example is that there is no proper second house.

This lack of a functional second chamber leads to substantial disenfranchisement; it also helps entrench voter apathy in the current UK. Why bother voting when half the government, far more than half by numbers is now simply there for life. People who have no concern about any impact their actions may have, such as life peers, often display little thought for those they are supposed to represent. A free Scotland should outlaw lifetime political appointees.

In any nation state there should always be a balance, it is right and proper that centers of population have a strong voice, that is where the majority live, but what about rural areas who’s needs have a tendency to speak with a quieter voice at national level. They must not be relatively disenfranchised. Scotland’s rural and outlying areas must never become another northern England with little hope of ever seeing effective representation in a true democracy.

Scotland must consider areas like the Orkneys, Shetlands, and the Hebrides who’s total area, land and sea, represent massive tracts of our nation. These areas should also have an equal voice, an equal voice that would encourage enfranchisement and immobilise Westminster’s agitation towards breaking Scotland more than she already has. An undertaking from Holyrood would help win their votes also.

Allowing Scots now proportionally pay for upwards of seventy life peerages, we could easily afford a second chamber of fifty, a chamber made up of the geographical list areas rather than by population, but a chamber with its own independent voice. Each of the ten approximately equal regions can elect five additional individuals to represent them in a second chamber.

We could easily utilise an additional vote between Holyrood primary elections to achieve this balance. The second vote can happen during local council elections, there need be no significant additional expense.

Each region having an equal voice in that chamber, irrespective of population size would provide a check and balance system that is considerably less expensive than a hundred Lords a-wittering in Westminster. It would be fairer, it would be quasi federal, it would be elected not appointed and it would serve to assist in moderating any severe excesses or bias that may from time to time issue from the existing chamber at Holyrood.

A geographically elected second house in Scotland would permit the areas of sparser population to feel enfranchised. It would permit them greater representation and would help to ensure their perpetual ongoing commitment to the community of the realm.

Laws would have to pass in both chambers, or the main chamber would be required to overcome a constitutional hurdle to override the second, such as a referendum with 60% approval.

There must be other changes made within Holyrood’s chambers as Scotland walks forwards. The potential of lobbying which could be contrary to the public weal should be minimised. Restricting lobbying is not a difficult proposition; simply prohibit any elected individual from joining any organisation or subsidiary with which they had dealings when in office.

Companies and organisations should be able to donate to the political process if they choose, but those donations should simply enter a common chest that is divided up fairly, perhaps a set amount for each prospective candidate and set amount for each active individual party member. There are ways. Scotland should never become a residence for the Nuclear, the Oil or Chemical lobbies; it should always be a fair and free home for its people.

In an ideal situation our base political process must be funded by tax, and it must be tied to a percentage of GDP. The political parties should only able to raise direct funds through individual memberships.

We have a good start in Holyrood, when compared to Westminster it is already a beacon of light and openness, but it is only a start.

Scotland must have what no nation or central government in Great Britain presently has, it must have a truly representative democracy which is directly answerable to the people, and not just at election time. Our present Holyrood has defied the odds and supplied us with an opportunity to have our say in 2014, when we accept the challenge it will have outlived its purpose, a purpose it was never designed to fulfil.

Thereafter it will be to our present generations to design a new Holyrood, one truly fit for Scotland’s purpose. We must not fail those who will come after us.

Tuesday, 10 April 2012

Today, and rightly so, there is a focus on the upcoming referendum, 2014, for good or bad, will be a pivotal date in Scottish history.

The question only a few are considering is what becomes of Scotland’s political landscape after 2014, or 2015. There is one item that can be viewed with relative certainty, that either 2014 or 2015 will see Scottish independence. 2014 by referendum vote or 2015 by UKGE vote and a majority of SNP MP’s being elected to the House of Commons.

A post independence political map is worth a purely conjectural look if only for the conundrums and extinction events it promises.

With it being acknowledged even by those in opposition to the idea that independence is anything from “an attractive option” to an almost foregone conclusion it’s difficult to see any other future. Even David Cameron’s been said to be focusing on the negotiations after the vote. This view is supported by a wide consensus from the Labour supporters for independence Facebook page through to the personal opinions of elected individuals in the “anti” camp.

The first question that springs to mind is, why wait until after the vote to begin negotiations?

With a clean and transparent government system ready for the referendum, a system where people know at least some of what they will get with a yes vote, the outcome will only be enhanced. Obviously beginning negotiations now to clarify issues would not be in the Union interest, the question is answered.

The first issue in the current system is the potential of present or future corruption and inappropriate influence or patronage, aka Westminster style. Policies and procedures must be laid out in law to make certain, as far as feasible, that Holyrood never becomes a mini-me to Westminster’s rampant corruption and cover-ups. The potential for scandal should be reduced as far as practicality permits.

Providing a clean and transparent political process with full accountability to the electorate must be among the first items of business for Holyrood. To this end there must be a recall option for any elected official, by all means the official concerned could stand again, but they would have to fight the seat. A trigger for recall could involve being convicted of any offence that carries the potential of prison, irrespective of a prison term actually being imposed. Suspension from a political party by the party membership could also be a trigger. Recalls must be automatic in such circumstances.

A recall should also be available by petition of the electorate, but such a petition should have a high hurdle, requiring perhaps more signatures than votes originally collected by the incumbent of the position.

We should also look at that what now applies to the private or financial sectors and understand, should it apply to elected officials, where perhaps all criminal and financial history should be considered, and that those with bankruptcy or criminal convictions must declare them on election forms, and if it’s less than a set period since the time since the incident that they are barred from standing for office. If even football has a regulation that considers a person “unfit” then to have any less expected of elected officials would be shameful. Our government must communicate these policies pre-referendum, it should vote them in.

As to a future political make up of our nation, the SNP could be expected to continue largely in its present form for a short period post independence, however it is acknowledged as a “broad church”, one containing not only dyed in the wool nationalists but converts from the entire political spectrum.

With the party identity being firmly center left at the present time it would be natural for individuals from the extreme left and extreme right to quickly depart into new or existing political structures after independence.

The exodus from the SNP to other parties should form an inverted bathtub type graph, beginning as a trickle, building to a relative flood and slowing again to a trickle as those most closely aligned with party principles are the last to leave; perhaps they might lose as much as 1/3.

In a fully sovereign Scotland there are severe issues for the parties of Union. These parties are all caught in a dilemma of their own manufacture. They cannot prepare for independence and reaffirmation of sovereignty in Scotland without seeming to have given up the fight before it has even come close to entering the final round. At the same time it is inarguable that the three main Unionist parties in Scotland must have such a contingency or face the strong potential of extinction with independence. Simple re-branding after rejection rarely works.

Without such a plan Scottish Labour will quickly cease to exist, they are fighting for the same tactical ground now commanded by the SNP, and the Scots electorate presently view that center left or social democratic area as the high ground. With the SNP having delivered the wishes of the electorate under such a position, Labour is never likely to recapture the territory in what will be an uphill battle.

It will be an almost impossibility for Labour because they will no longer have access to funding by the English Labour party, it would be inconceivable that another nations political elite controlled Scotland’s political parties. Funding from unions in England will also vanish. Certainly Uncle Sam would not tolerate the Republican’s being beholden on Mexico’s PRI party for funding and direction.

Even the conservatives party treasurer had to insist on a shell corporation in the UK recently as they contemplated the 250K donations from a pair of fake Lichtenstein “investment bankers”, at least until “Time” was called on the transaction. This choking of financial support at the border would naturally apply to all Unionist parties in Scotland. No funding quite simply equates to no party.

Severely reduced funding equates to an empty shell.

Following independence, Labour in Scotland would no longer be able to bus or ferry in supporters from another nation to assist them in all aspects of their political life. This legislation to ensure only Scots or Scots resident’s can impact Scotland’s political process is no different than exists at Westminster and should be tabled and implemented with effect as soon as possible, potentially before any election or referendum.

Without a contingency plan that they can publicly proclaim, or privately develop, the Unionist parties in Scotland are facing political oblivion, and so powerful is the overarching culture that they cannot privately develop such a plan in case it is leaked.

The Liberal Democrats are already an irrelevance; they have worked extraordinarily hard to achieve this position since their U-Turn on student fees. The self proclaimed “Home Rule” party has been exposed not just in the student fees area, but in their wholehearted support of Tory dominated London’s reaction to the independence campaign and its general policy stance. They no longer espouse “Home Rule”. Rather, it’s now a case of following a Conservative prime minister who refers to Scotland’s duly elected First Minister as “The mad Scotsman”, and delay, deny, postpone any power transfer of significance; with a possible “Jam tomorrow” should Scots actually reject liberty.

By its very name the Conservative and Unionist Party is stuck in a time warp. There can be no back up. Tory’s are already an irrelevance in Scotland; they are already approaching marginalization due to severe lack of credibility. Scots are at last questioning how a party that believes in standing on one’s own two feet, and will risk our service personnel in so-called democracy-building missions abroad, can believe Scotland is incapable.

Why do the Tory’s see Scotland as unable and incompetent, un-teachable even, when they spend so much to instill such values elsewhere? Why is it that the Isle of Man has greater autonomy than Scotland, but that’s OK, or that the Falkland’s are only British because they wish to be – they have been allowed choice? Simple questions that the Conservatives haven’t answered because they don’t dare declare the reasoning behind their convictions.

It is either that Westminster requires Scotland’s resources or the ideology of Edward the First still holds true, they will rule the entire British Isles, at least for as long as possible, for unless they do they believe they lack international credibility.

Effectively that’s what Scotland is to the Union, a paycheck carrying international credibility.

Knowing there can be no contingency plan for those representing the Union in Scotland without giving the clear understanding of breaking from and betraying their Westminster bedfellows means the alliance of any political party with Tory London will not just equal diminished stature for a generation, it means independence will simply be a merciful coup de grace to each and all.

What will happen post independence is anyone’s guess, but taking the crystal ball and giving it a good rub shows the following in the first few post independence years.

The SDA will probably capture the right wing, many SNP with a conservative leaning stance will migrate there over time, it may or may not integrate what remains of the Scottish Conservatives but it would be a logical sequence of events.

The Liberal Democrats will fragment, they will divide reasonably equally according to political conviction between the SNP and SDA.

The Labour party is the conundrum, with their political alignment being so similar to the SNP one would naturally anticipate them being integrated. The issue is the almost visceral hatred that many of the red rose demonstrates against followers of the thistle.

Unless one considers this almost demonstrable hatred to be simply a character flaw that can be overcome it should be projected new converts of hard core Labourites will be few indeed. They will either become floating voters, members of a re-invigorated Scottish Socialist Party or try to re-invent themselves as some middle alternative between the SNP and SDA. The unfortunate aspect for any such re-invention is that the area available there is small indeed. It will take a leader of true grit to exploit every opening in order to simply carve a niche there.

Labour in Scotland has not shown any promise of such a leader in very many years.

Wednesday, 4 April 2012

That’s what the government appears to be after with its “new” snooping laws. The fact that the Con-Dem’s vehemently opposed such an infringement while out of power speaks clearly to one overarching fact.

The purpose behind the imposition of these laws is about maintenance of power by those in power. In our multinational electronic age with accurate data readily available to those who care to dig, it leaves the powerbrokers and their spin doctors in an uncomfortable position. They no longer control the flow of information.

Examining the positive case for such Orwellian action, apart from an attempt to “out US the USA”, one can see that it might assist in solving crime. If a person was accused of engaging in child pornography for example it could be a worthwhile tool.

Even that argument falls when one realises that this capacity already exists, retroactively. What is being discussed is real time interception and monitoring.

Every electronic communication in the UK will be monitored in real time and a log retained, the ability to intercept, possibly modify or detain communications has not been specifically ruled out.

Fundamentally the state will be able to decide, based upon the broadest interpretation of the proposals, where you can look, what you can do, the information you can gather, with whom are you become “friends” and based upon the old assertion “fly with the crows” you could well find yourself on watch lists or under extensive surveillance.

The difference between the existing law, which is already far too overreaching, and the May proposals is simple, it’s real time. That’s significant if you already have the information you seek it’s difficult for “big brother” to undo that knowledge. If you can be prevented from receiving the information you seek, the “damage” cannot be done. For example, if you wish to know the truth about the McCrone report it’s now simple to find. With the direction of the proposed legislation it’s very conceivable you may, in future, be prevented from reading the report as it could be deemed damaging to the state.

To put this in a historical sense, imagine that before the 1979 referendum a law was passed to intercept and record every piece of mail dropping through your letterbox, “security services”, and I use the term loosely as it’s now open to being defined precisely who’s security they’re protecting, could steam open your mail and re-seal it before it arrived at your door. If the contents aren’t approved it might never arrive, but you end up on a “watch” list. Now consider you personally have no control over what someone else sends you.

When it’s electronic it might even come to you through a simple typing error in the address line.

Imagine yesterday’s world where every telephone conversation you ever had was eves-dropped and recorded for posterity, just in case. No warrant, no judicial review, just a fact of life, just a complete erosion of civil liberty of the innocent.

Possibly the only reason Westminster did not attempt to do such a thing in 1979 was simply that the technology didn’t exist. It’s only in the last few years with the massive reductions in electronic data storage costs that ideas like this have become practical. Ideas such as this would have exceeded the wettest dreams of yesterday’s fascist or America’s McCarthyists.

The timing is again significant; it helps us understand why those who opposed the violation of that most fundamental human right, privacy, reverse their position now. It’s unlikely to be Scotland, sadly, in Westminster’s eye’s we’re just not that significant, as the Cruddas’ tapes showed as far as Scotland’s concerned it’s just about simple exploitation.

It is far more likely that Westminster is extremely concerned about the Olympics, when the eyes of the world will be on London. The eyes of the world will be focused on the South East for a month or more in total. Journalists in their thousands or tens of thousands will descend upon England’s capitol during that time. There will be a month long media circus.

As Scotland’s referendum approaches there may be intermittent international coverage leading up to the big day, with a splash reporting the results afterwards.

Defining the trigger as the Olympics, also explains the need for the rush on the legislation and with the Olympics being such a prime target it’s understandable. Simply limit the coverage of the legislation to the period leading up to and through the Olympics if they are of such concern.

That will not happen as it also represents an excellent opportunity for permanent expansion of state control, with the Scots referendum next on the horizon there’s what can be described, at a minimum, as a happy coincidence.

The reality is that during the Olympics, Westminster, while focusing on two wee grannies chatting on-line with Skype, will be ignoring the elephant in the corner. Argentina has a gripe, the saber rattling gets louder daily, and there will be no better time for them to take action. Even a small, limited protest action would get instant worldwide media attention during the Olympics.

There are arguments about breaking the laws that already exist, and that such an expansion of state power would assist in bringing criminals to justice. The response to that is simple.

All online traffic should initially be private. No ands, no ifs, no buts!

Certain actions should be triggers for loss of privacy. Specific sites, such as those associated with terrorism or child pornography can be identified as areas of concern and court orders obtained to monitor site traffic and communication there.

When multiple visits are recorded from one origin point to these sites [for how many of us have gone somewhere accidentally, just to experience that “oh sh*t” moment and punch the back or page close button immediately] then a court order can be obtained for a limited time to also monitor that source.

The warrant would have an end date, perhaps ten days from issuance with a potential of one extension, after that the monitor and monitored would both require to be present and state a case as to why or why not the order should be extended. If authorization isn’t given it would be appropriate for all detail gained during the original monitoring period to be destroyed. Any other foreseeable action would be a presumption of guilt on the part of the individual.

Legislation enacted as described here would possibly be beneficial. It would serve to enhance security of the individual and society without severe intrusions into civil liberty, but it would also involve restoring much of the erosion already done and rolling back legislation enacted by previous governments.

We must also then consider the “secret trials” proposal that’s rumored to be proposed, trials that may happen without benefit of defense council. These measures even have the Lib-Dems threatening rebellion although Labour has apparently indicated support.

That is the real issue here. The security services and our elected representatives are moving the goalposts. Great Britain is an island now moving from a society where the individual is presumed innocent until proven otherwise by their peers into a society where all will be presumed guilty.

In effect this is a national electronic ankle bracelet without benefit of trial or even input by the potentially accused.